Ralph Gabrielle d. Del Rosario | Milbert M. Capistrano
On 19 May 2026, the Bureau of Internal Revenue (“BIR”) issued Revenue Memorandum Circular (“RMC”) No. 47-2026, which took effect immediately upon issuance. Promulgated pursuant to Section 5(J) of Revenue Regulations No. 7-2024 and RMC No. 91-2024, both implementing Republic Act No. 11976, otherwise known as the Ease of Paying Taxes Act, RMC No. 47-2026 prescribes simplified and streamlined guidelines and procedures for the closure and/or cancellation of business registration with the BIR.
RMC 47-2026 seeks to simplify frameworks which were previously provided under RMC No. 56-2008 and Annex A11 of RMC No. 57-2020.
A copy of RMC 47-2026 may be accessed here.
Coverage
Under Section 2 of the RMC No. 47-2026, the streamlined closure procedure shall apply to all business taxpayers registered with the BIR, that have permanently ceased business operations or have otherwise become subject to closure or cancellation of business registration.
Streamlined Documentary Requirements
RMC No. 47-2026 limits the required documents for closure and/or cancellation of business registration to the following:
- BIR Form No. 1905 (Application Form);
- List of ending inventory of goods and supplies, including capital goods — for VAT-registered taxpayers only;
- Unused invoices/supplementary documents and all other unutilized accounting forms (e.g., vouchers, debit/credit memos, delivery receipts, purchase orders), together with the inventory thereof;
- Original BIR Notices and BIR Permits issued to the taxpayer, as applicable (e.g. Certificate of Registration/Electronic COR (BIR Form No. 2303), Authority to Print, and Notice to Issue Invoice);
and Authorization Letter (e.g. Notarized Special Power of Attorney (for individual taxpayers) or a Notarized Board Resolution/Secretary’s Certificate (for non-individual taxpayers). In case of closure due to the death of an individual proprietor, the Death Certificate and competent documents evidencing the authority of the heir/executor/administrator (e.g., Deed of Self-Adjudication or Deed of Extra-Judicial Settlement with Special Power of Attorney) are required.
Compared to the previously prescribed requirements, RMC 47-2026 introduces two notable changes.
First, the requirement under RMC 57-2020 and RMC 56-2008 to physically surrender unused invoices and accounting forms for destruction in the presence of BIR personnel have been removed. Under the RMC 47-2026, these are merely surrendered together with the inventory thereof.
Second, the inventory of goods and supplies requirement is now expressly limited to VAT-registered taxpayers, whereas under RMC 57-2020, it was a general requirement applicable to all taxpayers. This appears to be consistent with the mandate of the Government to provide a business-friendly regime for micro business enterprises.
Electronic and Manual Modes of Filing
Another important feature of RMC No. 47-2026 is the option to file the application electronically or manually. A taxpayer now has the option of electronically filing the application and copies of the required documents through the taxpayer’s official email address as registered with the BIR or the BIR’s electronic registration facilities [i.e., the Taxpayer Registration-Related Application (TRRA) Portal and the Online Registration and Update System (ORUS)].
The documentary requirements under items 3 and 4 of Section 4, as discussed above (e.g., unused invoices/supplementary documents and other unutilized accounting forms, and original BIR notices and permits), must be submitted manually, regardless of the mode of filing chosen for the other requirements.
Filing of Final Tax Returns
The taxpayer is required to file all final or short-period tax returns covering the period from the beginning of the taxable year up to the date of closure, for all applicable tax types, and pay the corresponding taxes due. For periods during which there was no business activity, zero returns shall be filed.
Cessation of Penalty Accrual Upon Complete Submission
Upon complete filing and submission of the documentary requirements, the taxpayer’s registered form types shall be placed under “deregistered” status to ensure that no open cases will be generated. This is significant since no additional penalties for non-filing of returns shall accrue after the complete submission of the required documentary requirements.
Processing Timelines and Audit Considerations
RMC 47-2026 likewise highlights measures actively taken by the BIR to create a more business-friendly environment for micro taxpayers [i.e. those whose gross sales for the immediately preceding year do not exceed Three Million Pesos (PhP3,000,000.00), or whose gross assets upon retirement do not exceed Eight Million Pesos (PhP8,000,000.00)].
First, micro taxpayers shall not be subject to mandatory audit for closure and/or cancellation of business registration.
Second, the Tax Clearance for micro taxpayers shall be issued within three (3) working days from the date of submission of the application with the complete documentary requirements, provided the taxpayer has no open cases or outstanding liabilities. In case there are pending cases or liabilities, the Tax Clearance shall be issued within three (3) working days from the date of complete submission and payment of any outstanding tax liabilities, including penalties.
For taxpayers with a pending audit under an existing Letter of Authority, or taxpayers whose gross sales for the immediately preceding taxable year exceed PhP3,000,000.00 or whose gross assets upon retirement exceed PhP8,000,000.00, the Tax Clearance shall be issued and the closure or business registration cancellation process completed only after the termination of the conduct of the audit.
Consequences of Non-Compliance
While RMC No. 47-2026 provides for a more streamlined process, the said issuance nonetheless reiterates that taxpayers who cease business operations without submitting the prescribed documentary requirements for closure and/or cancellation of their business registration shall continue to be liable for all their tax obligations, including the filing of tax returns and payment of taxes, as well as the corresponding penalties, until closure and/or cancellation of business registration is completed with the BIR.
Accordingly, RMC 47-2026 represents a meaningful step toward reducing the administrative and financial burden on taxpayers winding down their BIR registrations. The cessation of penalty accrual upon complete documentary submission and the introduction of defined processing timelines, for micro taxpayers in particular, address long-standing uncertainties in the closure process. For larger taxpayers or those subject to pending audits, however, the audit-completion requirement remains a significant consideration, and the practical impact of RMC 47-2026 will depend substantially on the circumstances of each taxpayer’s outstanding obligations and audit exposure.